A preference share which confers no right to prior periods' unpaid dividends if they were not declared is called:
A) Noncumulative preference share.
B) Participating preference share.
C) Callable preference share.
D) Cumulative preference share.
E) Convertible preference share.

Question

Quizplus · Accepted Answer

A noncumulative preference share means that the shareholder is not entitled to receive any unpaid dividends from prior periods if they were not declared by the company. This contrasts with cumulative preference shares, which do allow for the accumulation of unpaid dividends. Participating preference shares give the shareholder the right to receive additional dividends if the company's profits are higher than expected, while callable preference shares can be repurchased by the company at a specified price. Convertible preference shares can be converted into common shares at the option of the shareholder.

A Preference Share Which Confers No Right to Prior Periods